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Insurance Breakdown

Insurance can get confusing sometimes, especially with the many options, plans, and regulations out there. We’ve pulled together some facts to help make the insurance game a little easier to understand.

Health Insurance

With the Affordable Care Act (ACA), also known as “ObamaCare”, in place, changes have been implemented in the health care industry. One of these changes is the payment of a tax penalty if an individual does not have insurance. . According to ObamaCare Facts, currently the penalty breaks down to the greater of $695 per adult, $375.50 per child, or 2.5% of household income above your tax return filing threshold for your filing status; this penalty is set to increase every year. You can, of course, avoid the fee by getting insurance or by qualifying for an exemption (exemptions can include income below the tax filing threshold or going less than three months without coverage). Keep in mind that if you choose to pay the fee instead of getting coverage, at some point it will be more expensive to pay the fee rather than just buy insurance.

Due to the ACA, insurance companies cannot drop a sick customer, pre-existing conditions have been removed, and there is protection against gender discrimination. Obamacare also makes an effort to make insurance more readily accessible. Sometimes people mistake the ACA as an insurance provider, but the program actually only regulates the health insurance industry; it is not a creator of insurance.

HealthCare.gov is a web based marketplace created to help you find health insurance.”

If you don’t have insurance coverage, HealthCare.gov is a web based marketplace created to help you find health insurance. You can compare health plans, possibly qualify for reduced premiums and other health care fees, and enroll in a plan. Enrollment for 2016 coverage has ended, but open enrollment for 2017 health coverage will open later in the year from November 1, 2016 to January 31, 2017. Of course, healthcare.gov isn’t the only place to get health insurance. You can go through any organization- however, checking with the marketplace may be a smart first move to see if you qualify for a reduced rate.

If you want more details regarding how this regulation affects you, what to do to get insurance, and how to enroll, ObamaCare Facts gives a comprehensive explanation of the ACA in an easy-to-understand way.

Car Insurance

Automobile insurance is required for all car owners and drivers.

Non-Car Owner Options
Michele Lerner on Bankrate mentions that when renting a car, insurance is usually available, and necessary, to purchase through the company. If borrowing a car from a relative or friend, his or her insurance policy will cover you, but you may not know the amount of coverage that the policy has. An option Lerner advocates for non-car owners that drive extensively is nonowner car insurance. This insurance if for those people who drive a lot, but don’t have a car and want to be protected in the event that you have an expensive at-fault accident. It is typically about half the cost of normal car insurance, but varies depending on the state and company the insurance is purchased through.

If you do have a car, you are probably already aware of the types of insurance available to you, but we still want to break it down to the three most common types.

Liability Insurance
Liability insurance protects you when you are the person who’s at fault in an accident. This type of insurance is usually required by state law. It protects you when you are accountable for damages and injuries in a collision. Without liability insurance, you risk huge financial hardship if you are held accountable for an accident, since any damages and injuries will have to be paid for out of pocket. This type of insurance is very prudent to have, even if your state does not require it.

Vehicle coverage is available to protect damages to your vehicle. There are two types of main categories in these: comprehensive and collision. Comprehensive covers items such as fire, theft, vandalism, and natural disasters. Collision is for repairs incurred during an accident. Other than these two main categories, there are other types of vehicle insurance you can invest in, such as emergency road service and mechanical breakdown. Whatever type you do get, keep in mind that vehicle-based insurance typically only covers damages to your own vehicle.

Medical car insurance is exactly like what it sounds like–if you or someone involved in an accident of your fault, it covers medical payments. The exact amount covered will depend on the plan, but it can include coverage for hospital bills, dental work, or even funeral costs for you or your passengers.

There are countless options when it comes to both health and car insurance. The most important thing to do is analyze what kind of coverage you need, then find a plan that meets your needs and  within your budget. Investing in insurance is worth it, especially if something unexpected happens.

The views expressed by the articles and sites linked in this post do not necessarily reflect the opinions and policies of Cash Central or Community Choice Financial®. 

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